1. The Euro is not 30% backed by gold. Rather, the ECB consolidated balance sheet includes exchange reserve assets, of which gold and gold receivables make up 30%. Those reserves are primarily made up dollars. Which the ECB hasn't used--yet.
If the Euro were "backed" by 30% gold., it's price vis a vis gold would have been fixed, in which case it would have maintained parity against the dollar since January.
OK.. get technical. So the EMU aggreement stated that gold reserves would be a minimum of 15%, and that all 11 CB together accounted for some 30% reserves, twice what is required.
But the very fact that they hold that gold as a reserve is as a form of collateral, monetary leverage (selling gold and buying Euros) is a statement in itself that their gold reserves are there as a psychological support for their currency as a proxy gold standard.
But since you brought up the point of fixing Euros to a certain price of gold, how would they go about that? What would be the fixed exchange rate for Euros/gold (stated in current dollars for easy translation, please).
As for why the D mark advanced against the Dollar since WWII, I would suggest that Germany's economy was devastated, thus its currency was created anew and subsidized by the US until the 1970's. Remember the Marshall Plan? Is it much easier for a currency to make gains against the US because Germany was completely remade and its economy started basically from zero to transform into what it is now.
As for the Swiss Franc, it has not been doing so well lately against the dollar, if I recall.
By the way, can you explain why Panama outranks all other nations in that list for NOT losing value for their currency?? Especially since the Balboa is minted here in the US and they use the US dollar.
Interesting....
And no US has not necessarily been "faster", but that we started from a position of strength wherein a 2% gain in our economy is still a massive amount of growth in real GDP terms. It will take some time and some extraordinary circumstances before any other sovereign nations exceeds our economic output. When that happens, then their currency may find favor over the dollar.
Regards,
Ron |
